PROACTIVE NEWS SUMMARY: Ormonde Mining, Weatherly International, Aureus Mining, Epistem, ImmuPharma


Mining stocks took centre stage this morning with Proactive Investors dedicating three main stories of the day to the sector, including a report on the results of the definitive feasibility study for Ormonde Mining’s (LON:ORM) Barruecopardo tungsten project.

The results, said Ormonde, have confirmed both its technical viability and exceptional economics.

Plant commissioning is planned to begin in the third quarter 2013 and will see Ormonde become a major European tungsten mining company.

The study is based upon an average 227,000 metric tonne units (mtu) of tungsten trioxide (WO3) production per year at a prudent base case ammonium paratungstate (APT) price of US$350/mtu, well below the current APT price of US$437/mtu.

APT is the intermediate tungsten product which is most used for tungsten pricing, quoted in metric tonne units. One mtu equals 10 kilogrammes.

The total JORC-compliant global mineral resource estimate stands at 27.4 million tonnes grading 0.26 per cent WO3, for a total of 7.1 million mtus of WO3, with 4.1 million mtus classified as measured and indicated resources.

Two other stories focused on Weatherly International (LON:WTI) and Aureus Mining (LON:AUE). One of the articles took a closer look at yesterday’s report form Aureus, which is focused on precious metals.

The results from its Leopard Rock exploration prospect in Liberia were warmly received by analysts.

This is the first of three exploration prospects in the area surrounding the firm’s New Liberty gold mine, which is will start producing over 120,000 ounces a year in 2013.

Initially, New Liberty has an eight year mine life and exploration is central to the company’ future plans.

Aureus can support New Liberty’s 123,000 ounce a year production profile with exploration, chief executive David Reading told Proactive Investors in a recent interview.

“The focus has now moved from New Liberty to our other targets within our large mining area, there are many and they are growing all the time,” Reading said.

Aureus revealed the first drill results from Leopard Rock yesterday. They included the assays from the first nine of 24 diamond drill holes.

The highlight results had 17.6 grams per tonne (g/t) over 4 metres and 6 metres at 9.4 g/t gold.

Additionally, trenching and channel sampling has revealed that the mineralised system extends over at least 1.2km and is still open to the north east and south west. The best results from sampling found 6.4 g/t over 11 metres and 6.9 g/t over 4 metres.

“Results from Leopard Rock, one of three high-priority targets on a 13 kilometre corridor, should re-ignite investor interest in the regional exploration programme,” said Brock Salier, mining analyst at GMP Securities.

Salier explained that even a small high-grade resource revolutionises the value and production-profile at New Liberty, which is just 40 truckable kilometres away.

Furthermore he believes the results are an endorsement of the company’s systematic exploration programme and it increases the prospectivity of the Leopard Rock – Ndablama – Gondoja structural corridor, which is believed to extend over 13 kilometres.

The analyst adds: “Although early days yet, the Leopard Rock target is geologically very similar to New Liberty.”

Meanwhile, Weatherly emerged among the top performing stocks in London markets today, seeing its shares rally 20 percent as investors were buoyed by the copper producer’s interim results.

This morning Weatherly reported a US$13.3 million profit.

It also revealed good cash flows from the mines within its central operations and said it is on track to complete a feasibility study for the Tschudi open pit in the coming months. 

City broker Collins Stewart says the stock is currently trading at a 40 per cent discount to net asset value and it believes investors will turn their attention to Weatherly International as an emerging copper producer.

“Weatherly offers an attractive mix of undervalued cash flow from ramping up operations, combined with plans to grow copper production three-fold to 2015 through the development of the Tschudi Project in Namibia,” said Collins Stewart mining analyst Tim Dudley.

He adds: “Among the limited number of copper juniors listed in London, Weatherly’s substantial growth profile and existing profitable production stands out.

“The producer is well placed to benefit from China’s rising copper demand against challenged global production growth, sustaining C1 cash cost margins at 40 per cent.”

Two other articles by Proactive were dedicated to the bio tech sector. One of them was an in-depth report on AIM-listed Epistem (LON:EHP), which has seen its share price jump 17 per cent in just over a month.

The catalysts for this movement, according to a research note from City broker Merchant Securities, is Swiss giant Roche’s US$5.7 billion hostile bid for Illumina, the San Diego-based maker of gene sequencing machines.

The interest of Roche in this emerging arena reveals the tectonic plates of drug research are changing decisively in favour of personalised medicines rather than mass-market treatments, analysts said.

Roche is the world’s largest maker of cancer drugs. And the rationale for the deal is that Illumina’s technology will allow doctors to target and tailor these treatments on a very personal level.

By the end of the year Illumina hopes to be marketing a machine capable of scanning a person’s complete DNA within a day, significantly speeding up the process.

“Roche’s hostile bid for Illumina sparked a lot of interest in the genetic sequencing space,” said Alex Morozov, an analyst at Morningstar, recently.

Epistem really is at the cutting edge of this science, which may explain the speculative interest in the stock.

It has partnerships with four of the of the top 10 pharma companies for biomarkers used in the area of personalised medicine.

And in the Genedrive it has developed a point of care molecular diagnostic device, which City firm Merchant reckons has huge potential.

“Why is this exciting? Well the product is fast, small, lightweight, low voltage, very high margin (costs $300 to make, sells for a few $’000) and can be used for diagnostics anywhere,” the broker said in a note to clients.

“The unit can be used to cover a wide range of diseases (STD, oncology, TB, forensics) and is very simple to use (plus it looks a little like an iPad). Sales have already started and we expect news flow soon on this product.”

Another report sector that fellow biotech stock ImmuPharma’s (LON:IMM) leading drug, Lupuzor, is expected is expected to attract the attention of the sector’s big boys.

Very rarely does a small drug company have the opportunity to do the same transaction twice – with every prospect of getting an even better deal the second time around.

But this is exactly what has happened with ImmuPharma, whose good fortune was the result of the US$6.8 billion takeover of joint venture partner Cephalon by generic drug maker Teva.

After the deal was consummated, ImmuPharma was able to wrestle back the rights to Lupuzor, a treatment for the auto-immune disease lupus.

The point to emphasise is the British minnow took the drug back - thanks mainly to a watertight contract, which allowed it to regain control of Lupuzor. It wasn’t returned unwanted.

Not just that, it received all the data collated by Cephalon free of charge.

The potential market for the product is such that Lupuzor is a blockbuster in the making.

“It is quite unusual to get a second bite of the cherry in this way,” says chief executive Dimitri Dimitriou.

That’s an understatement. It is unheard of to reclaim such a precious asset, and ImmuPharma’s management and lawyers should be commended for their diligence in drafting the initial contract with Cephalon.

The next step is to find a new licensing partner for Lupuzor, which has the all-clear to go into phase III clinical trials.

Once completed, the approval process will be fast-tracked by America’s all powerful Food & Drug Administration, shaving around a year off the process.

The company has also been given approval to start the next phase of development with a Special Protocol Assessment. This SPA is an important sign-off on the company’s clinical trial protocols.

The agency is essentially saying that, assuming no unforeseen issues, it will approve the drug if it matches or exceeds certain criteria.

Since the SPA is granted before the data is generated, the FDA tends to be conservative when handing them out.

Dimitriou revealed recently he has “rekindled” negotiations with big pharma companies interested in Lupuzor.

And it seems the interest is coming from all around the world, including the UK, US, Europe and Japan.

“The names include the top 10 or 15 in the world,” he adds. 

“We had discussions with companies before Cephalon. It was very easy to rekindle those discussions. The great thing is the stage Lupuzor has got to.”

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